Senior High School

Business Ethics and

Social Responsibility
Second Semester – Module 3
Code of Ethics in Business
 COPYRIGHT 2021

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Development Team of the Module

Writer: Marie Beth B. Rivamonte

Editors: Jessel Lou M. Cinco, Doreen N. Lictag, Chorazine L. Sulima
Reviewers: Krystel Grace L. Calderon
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Layout Artists: Ivan Paul V. Damalerio, Alberto S. Elcullada, Jr., Iris Jane M. Canoy
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 Senior High School

Business Ethics and

Social Responsibility
Second Semester – Module 3
Code of Ethics in Business
Introductory Message
For the facilitator:
Welcome to the Business Ethics and Social Responsibility Self-Learning
Module on Code of Ethics in Business.

This module was collaboratively designed, developed and reviewed by

educators both from public and private institutions to assist you, the teacher or
facilitator in helping the learners meet the standards set by the K to 12 Curriculum
while overcoming their personal, social, and economic constraints in schooling.
This learning resource hopes to engage the learners into guided and
independent learning activities at their own pace and time. Furthermore, this also aims
to help learners acquire the needed 21st century skills while taking into consideration
their needs and circumstances.
In addition to the material in the main text, you will also see this box in the body
of the module:

Notes to the Teacher

This contains helpful tips or strategies that will help

you in guiding the learners.

As a facilitator, you are expected to orient the learners on how to use this
module. You also need to keep track of the learners' progress while allowing them to
manage their own learning. Furthermore, you are expected to encourage and assist
the learners as they do the tasks included in the module.
For the learner:

Welcome to the Business Ethics and Social Responsibility Self-Learning

Module on Code of Ethics in Business.
This module was designed to provide you with fun and meaningful opportunities
for guided and independent learning at your own pace and time. You will be enabled
to process the contents of the learning resource while being an active learner.

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 Code of Ethics in Business
CONTENT STANDARD
The learners demonstrate an understanding of the common practices in
business organizations.

PERFORMANCE STANDARD
The learners are able to craft simple “Code of Ethics” or “Codes of Right
Conduct”

LEARNING COMPETENCY
The learner should formulate a code of ethics that reflect core principles
derived from analyses.

LEARNING OBJECTIVES
At the end of this lesson, the students should be able to:
1. Differentiate ethical and unethical practices;
2. Identify which common practices in business organization are
acceptable or not;
3. Appreciate the importance of code of ethics in business organization;
4. Develop good decision making in a certain situation; and
5. Craft a simple “code of ethics” or “right conduct”.

INTRODUCTION

Few years from now, you will be employed whether in a public office or in a
private enterprise. As an employee, it is very important that you display good ethics,
especially in your workplace. This module was prepared for you so that you will have
a good interpersonal relationship with all the people around you, specifically with the
ones you will work with.

Business and Ethics are always interrelated. Ethics guides us that we are doing
the right thing. In the conduct of the business, we need to follow ethical standards of
the company.

Ethical behavior, whether at a corporate, professional, or personal level, reflects

the standards and values that govern the individual and the organization he or she
serves. Organizations create their own community, which is conveyed collectively as
values. Such values or beliefs have an effect on internal company relationships,
productivity, reputation, employee performance and retention, legalities, and the larger
society in which they served. As a result, most organizations generate a list of

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organizational values and codes of conduct to be recognized and adhered by all
workers. Motivating and enhancing constructive actions, and at the same time building
an atmosphere that prevents unethical behavior are vital obligations on the part of both
administrators and workers.

PRE-TEST

Direction: Kindly choose the letter of the correct answer. Encircle your answer.

1. Which of the following statements is true about Ethics?

A. It is the study of the wants and needs in business.
B. It is the study of the relationship between people in a business.
C. It is the study of what is right and wrong in human behavior and conduct in
business.
D. None of the above.

2. Which is considered an unethical business practice?

A. Treating employees fairly.
B. Selling a good quality product
C. Buying substandard materials for production.
D. Hiring the most qualified applicants for vacant positions.

3. What do you think is the benefit of practicing good business ethics?

A. Lack of trust
B. Decrease in product sales
C. Low morale of employees
D. High employee retention rate

4. Mendi is always late in his client’s meeting. What can you say about him?
A. Mendi is busy.
B. Mendi is optimistic.
C. Mendi is very dedicated.
D. Mendi is unprofessional.

5. What is a written set of rules that guide the employee in an organization on how to
conduct himself in accordance with the company’s ethical standards and values?
A. Code of Ethics C. Executive Summary
B. Mission Statement D. Goals and Objectives

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6-10. Directions: Match the items in Column A to its description in Column B. Write
your answers on a separate sheet of paper.

A B
6. Ethical Issues in Production
7. Ethical Issues in Sales and
Marketing
8. Ethical Issues in Finance
9. Ethical Issues in Human
Resource Management
10. Business Practice
A. Tasks include hiring and performance
evaluation.
B. Tasks involve trading practices and
conditions, and tax payments.
C. Tasks involve protection of consumers and
honesty in delivery.
D. Task includes that its products do not inflict
unnecessary harm.
E. A method, procedure, process, or rule
employed or followed by a company in the
pursuit of its objectives

11-15. Directions: Read each statement below and classify it according to its ethical
issue. Write only the letter of your answer on a separate sheet of paper.
A. Ethical Issues in Finance
B. Ethical Issues in Production
C. Ethical Issues in Sales and Marketing
D. Ethical Issues in Human Resource Management

_________11. The food products of TT and Company are well-sealed.

_________12. Rolly’s Ice Cream Pop is made under strict processing standards.
_________13. The company supply officer purchased office supplies from their
family owned general merchandise store.
_________14. Milky Way Mobile, a new brand of cellphones, launched its new
mobile phones at an overpriced amount.
_________15. TKY Enterprise rejects applicants ages 35 and up.

REVIEW OF THE PREVIOUS MODULE

Your knowledge of the core principles underlying fairness, accountability, and

transparency will be very helpful in this next lesson. Let us review.

Fairness involves balancing the interests involved in all decision-making

including any decisions related to hiring, firing (including the investigatory process),
and the compensation and rewards system.

Accountability is the obligation to demonstrate that work has been conducted

in compliance with agreed rules and standards or to report fairly and accurately on
performance results vis à-vis mandated roles and/or plans.

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 Transparency is defined as being authentic in the way an organization
manages themselves externally – to stakeholders, to prospective customers and talent,
and within the community.
Stewardship refers to taking responsibility for the business and the effects it
has on the world around it.

Activity 1
Directions:
Identify what principle (Accountability, Fairness, Transparency, or
Stewardship) is being applied in the following situations. Write your answer on
a separate sheet of paper.

_________1. Mrs. Reyes keeps her class record organized and updated because
she is very objective in giving grades.
_________2. The MBR corporation holds quarterly board meeting to ensure that
every member is well-informed about the current business situations.
_________3. Star Corporation hires external auditor to assess and evaluate their
financial statements. If the auditor finds out any discrepancy, the
company will make sure that the accountants and other financial
executives as part of their responsibilities in the company will make
_________4. Mr. Pascual, the manager of the Union Bank, reported the savings of
the company in all partner banks accurately.
_________5. The security guard of the SNNHS always makes rounds every 3 hours
during his night shift to make sure that the company’s assets are
secured.

PRESENTATION OF THE MODULE

This module introduces ethical practices that can be applied not just in business
but in day-to-day living. It aims to provide learners an accurate and clear
understanding of ethical theories. This should be the starting point to correctly apply
the said theories in concrete ethical situations in the business world.

ACTIVITY

Activity 1: Finding the ETHICAL or UNETHICAL.

Directions:
Write LIKE if the statement is ETHICAL; DISLIKE if the statement is
UNETHICAL. Write your answer in a separate sheet of paper.

_________1. Obeying company’s policy and rules.

_________2. Showing initiative to clean the room without being told.

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 _________3. Taking credit for your classmate’s work.
_________4. Using company’s supplies for personal purposes and taking some
of the supplies to home.
_________5. Selling AVON products during working hours.
_________6. Engaging in negative gossip about your other classmate.
_________7. Extending lunch/ snack breaks at work.
_________8. Developing professional relationships with co-workers.
_________9. Wandering inside and outside the workplace without any reason.
_________10. Using foul language on classmates in and out of the school.

ANALYSIS

Directions: Classify each phrase below to the corresponding column of ethical issues
where it belongs. Write your answers on a separate sheet of paper.

1. Harm to environment and to people who live nearby

2. Encountered misleading financial reports
3. Overage applicants are not allowed
4. Hiring limited to relatives and friends
5. Honesty in prices and product claim benefit
6. Truthfulness in advertising
7. Fraud on tax computation
8. Destruction of bodies of water
9. Manipulation in prices and product content
10. Exaggerated/false advertisements

Ethical Issues:

Finance Human Sales and Production

Resource Marketing
Management

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ABSTRACTION

Ethics is derived from the Greek word “ethikos” which means “having to do with
character. We have known Ethics as the Moral Science or Moral Philosophy which
refers to the theory of morality of right conduct

How to Apply Ethics

At the individual level, improving and encouraging every employee to respect

and adhere to ethical principles are the concentration of the organization. The key
components of education, individual reflection, and experience are to achieve a strong
sense of professionalism and recognizing certain professional decisions' ethical
implications. These fundamental values govern ethical organizations.

A company that follows sound accountability practices ensures that all of the
debtors' financial commitments are met on time. Accountability in the workplace can
also be demonstrated by careful preparation, recruiting, and retaining staff, as well as
budget control and reporting.

An ethical company must also adhere to fairness. Employees who feel secure
because there is no impartiality in the workplace are more likely to stick with the
company's structure. Transparency and stewardship, on the other hand, are well-
known attributes of good corporate governance. Transparency in business fosters
employee trust as well as trust among stakeholders such as vendors, investors, and,
of course, consumers. Stewardship, on the other hand, is an ethical method of
effectively controlling a company's resources.

To ensure that all of those values are followed by all workers in the company,
a Code of Ethics, also known as a Code of Conduct, is created to serve as the
business's guiding light in ensuring ethical behavior.

ETHICAL CODE OR CODE OF ETHICS is a written collection of instructions

distributed by an organization to its staff and management to help them perform their
activities in compliance with the organization's primary principles and ethical standards.
Furthermore, a code of ethics is a set of guidelines implemented by an institution to
assist those who are called upon to make decisions; it is about knowing the difference
between "right" and "wrong."

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 A CODE OF CONDUCT is a document intended to influence employee actions.
They define the protocols to be followed in particular ethical circumstances, as well as
whether or not a breach of the code of ethics occurred and, if so, what solutions should
be applied.

A CODE OF PRACTICE is a set of rules adopted by a professional, a

government, or a non-government organization to govern the profession. It may be
referred to as a code of professional responsibility, as it would address challenging
issues and decisions that will inevitably arise, as well as provide a clear account of
what conduct is considered "ethical," "correct," or "right" in the given situation.

Examples of Different Ethical Issues in Business

1. Ethical Issues in Finance Department

Fairness in trade practices, trading conditions, financial contracting,
procurement practices, consulting services, tax payments, internal audits, external
audits, and executive compensation all fall under the umbrella of finance and
accounting, while particular corporate ethical/legal wrongdoing involves insider trading,
bribery/kickbacks, deceptive financial analysis, and stock fraud.

2. Ethical Issues in Sales and Marketing Department

The values, principles, and/or morals that marketers and marketing
organizations will work on are referred to as marketing ethics. Promotion of outdated
or unsafe products/services; openness regarding environmental threats; food
additives (Genetically Modified Organisms); potential health hazards or financial risks;
consumer privacy and autonomy; truthfulness in advertising; and fairness in price and
distribution are all examples of ethical marketing concerns. Some argue that ads have
the potential to influence people's opinions and relationships with others, implying that
there is an ethical duty to avoid distorting such expectations and relationships.

Pricing activities, which include illegal actions such as price theft and price
skimming, are included in marketing ethics. On the other hand, provocative ads,
objectification, and school marketing have all raised questions about advertising.

3. Ethical Issues in Production Department

Business ethics usually refers to a company's responsibilities to ensure that its
products and processes do not create unnecessary harm. Many goods and services
can be created and used with no risk, making determining the ethical path difficult.
However, some customers choose to buy items that harm them, such as tobacco
products.

4. Ethical Issues in Human Resource (HR) Management Department

Hiring and orientation, performance assessment, training and development,
labor relations, and health and safety issues are all responsibilities of Human

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Resource Management. Discrimination based on age, gender identity, sexual
orientation, race, ethnicity, disability, and physical appearance are all ethical problems
that the HR department is responsible for.

Code of ethics is not limited to business; it can also be applied and practiced
in school, government, and even professional groups. There is a code of ethics for
teachers, accountants, engineers, lawyers, doctors, nurses, and all other
professionals to ensure that they are following the same ethical standards in their
professional practice.

APPLICATION

Directions: Write your answers on a separate sheet of paper.

How ethical are you?

1. After finding a gold watch in a hotel room. You:
A. Turn it over to the lost and found department of a hotel
B. Keep it because you believe in the finder’s keeper philosophy
C. Consider it yours unless the previous occupant looks for it and the front
desk calls your attention to turn it over.
D. None of the above.

2. After dinner, the waiter brings the bill. Upon checking it, you notice that no
dessert, and drinks to the bill. You:
A. Don’t pay the bill. It was their mistake.
B. Call the waiter and ask him to recompute the check and add the dessert
and drinks.
C. Pay the bill and give him the bigger tip since you saved money because
of the dessert and drinks that were not included in the bill.
D. None of the above.

3. In a team meeting, your boss congratulates you for a project that was done by
someone else from the team. You:
A. Never say anything about it.
B. Stay silent in the meeting and later approach your co-worker you are
sorry because the boss did that
C. Explain to boss immediately that it was not your work and give credit
where credit is due.
D. None of the above.

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 4. Your company has a policy that prevents employees from accepting any gifts.
The policy also requires that you inform your manager about the gift. A supplier
you have known for several years offers you a Louis Vuitton bag. You:
A. Inform your boss and hope for approval.
B. Accept the gift and tell your manager afterward.
C. Accept the gift and do not tell your manager about it.
D. None of the above.

5. You are with some friends at the park. There are different bins in the area. A
friend left an empty soda can on the bench. You:
A. Better not say anything.
B. Put the soda can into the correct bin.
C. Left also your soda can on the bench since your friend did it first.
D. None of the above

Directions: Write a brief paragraph that tells how you are going to react in the
following situations and create a simple “code of ethics” or “right conduct” for each
problem that can be applied in the situation. Write your answer on a separate sheet of
paper.

Rubrics:
Content 5 pts.
Grammar &Mechanics 5 pts.
Ethical implication of decision 5 pts.
15 pts.

1. Two of your classmates have created an offensive website that attacks

students and teachers. The principal wants to know who did it and you are
the only one who knows. Should you lie to the principal or betray your
classmates?
2. Stella’s Business Ethics teacher made a huge mistake on Stella’s final
grade. A mistake that was very much in Stella’s favor. Should Stella point
out the mistake to her teacher, or accept her good fortune quietly and
gratefully?

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POST-TEST

Directions: Encircle the correct answer. Write your answer in a separate sheet of
paper.

1. What is a written set of rules that guide the employee in an organization on how to
conduct himself in accordance with the company’s ethical standards and values?
A. Code of Ethics C. Executive Summary
B. Mission Statement D. Goals and Objectives

2. Which of the following statements is true about Ethics?

A. It is the study of the wants and needs in business.
B. It is the study of the relationship between people in a business.
C. It is the study of what is right and wrong in human behavior and conduct
in business.
D. None of the above.

3. Which is considered an unethical business practice?

A. Treating employees fairly.
B. Selling a good quality product
C. Buying substandard materials for production.
D. Hiring the most qualified applicants for vacant positions.

4. What do you think is the benefit of practicing good business ethics?

A. Lack of trust C. Low morale of employees
B. Decrease in product sales D. High employee retention rate

5. Mendi is always late in his client’s meeting. What can you say about him?
A. Mendi is busy C. Mendi is very dedicated
B. Mendi is optimistic. D. Mendi is unprofessional.

6-10. Directions: Read each statement below and classify it according to its ethical
issue. Write only the letter of your answer on a separate sheet of paper.
A. Ethical Issues in Finance
B. Ethical Issues in Production
C. Ethical Issues in Sales and Marketing
D. Ethical Issues in Human Resource Management

_________6. Rolly’s Ice Cream Pop is made under strict processing

standards.
_________7. Milky Way Mobile, a new brand of cellphone, launched its new
mobile phone at an overpriced amount.

10
 _________8. The company supply officer purchased office supplies from their
family owned general merchandise store.
_________9. TKY Enterprise rejects applicants ages 35 and up.
_________10. The food products of TT and Company are well-sealed.

11-15. Directions: Match the items in Column A to its description in Column B. Write
your answers on a separate sheet of paper.

A B
11. Ethical Issues in Finance
12. Ethical Issues in Human Resource
Management
13. Business Practice
14. Ethical Issues in Sales and
Marketing
15. Ethical Issues in Production
A. Tasks include hiring and performance
evaluation.
B. Tasks involve trading practices and
conditions, and tax payments.
C. Tasks involve protection of
consumers and honesty in delivery.
D. Task includes that its products do not
inflict unnecessary harm.
E. A method, procedure, process, or rule
employed or followed by a company
in the pursuit of its objectives

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 12
PRE-TEST POST-TEST Review
1. C 1. A 1. Fairness
2. C 2. C 2. Transparency
3. D 3. C 3. Accountability
4. D 4. D 4. Transparency
5. A 5. D 5. Stewardship
6. D 6. B
7. C 7. C ACTIVITY
8. B 8. C 1. ETH 6.UNETH
9. A 9. D 2.ETH 7. UNETH
10. E 10. B
11. B 11. B 3.UNETH 8.ETH
12. B 12. A 4.UNETH 9.UNETH
13. C 13. E 5.UNETH 10.UNETH
14. C 14. C
15. D 15. D
ANALYSIS APPLICATION
1. Production 1. A
2. Finance 2. B
3. Human Resource 3. C
4. Human Resource 4. A
5. Sales 5. B
6. Sales
7. Finance ⚫ Student answer may vary
8. Production ⚫ Student answer may vary
9. Sales
10. Sales
ANSWER KEY
REFERENCES

Books

Jerusalem, V., Palencia, M., & Palencia, J. (2017). Business Ethics and Social
Responsibility (First Edition). Rex Book Store, Inc.

Online and electronic resources

Hayes, A. (2021, March 04). How codes of ethics work. Retrieved April 21, 2021, from
https://www.investopedia.com/terms/c/code-of-ethics.asp

Irby, L. (2020, June 03). 10 simple ways to manage your money better. Retrieved April
20, 2021, from https://www.thebalance.com/ways-to-be-better-with-money-
960664

KenFaulkenberry. (2020, December 11). Types of investment risk. Retrieved April 19,
2021, from https://www.arborinvestmentplanner.com/types-of-investment-risk/

King, Stephen. "Top 12 Bookkeeping Best Practices for Achieving Business

Success". Growthforce.com. https://www.growthforce.com/blog/top-12- bookkeeping-
best-practices-for-achieving-business-success

Ethical dilemmas archive - lesson plan & curriculum. (2021, February 25). Retrieved
April 21, 2021, from https://www.goodcharacter.com/the-daily-dilemma/

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For inquiries or feedback, please write or call:

Department of Education – Schools Division of Surigao del Norte

Peñaranda St., Surigao City
Surigao del Norte, Philippines 8400
Tel. No: (086) 826-8216
Email Address: surigao.delnorte@deped.gov.ph

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